City of Texarkana v. Hudgins Produce Co.

Smith, J.,

(after stating the facts). It is said that the ordinance is void because it designates the business of selling cider, either at wholesale or retail, as a privilege, and undertook to derive a revenue from the exercise of this privilege by imposing a tax so excessive that its purpose to raise revenue is made manifest. It is true the business of selling cider is referred to as a privilege; but the use of that term is not controlling in the consideration of the purpose of the ordinance. It is proper to consider not only the amount of the license fixed by the ordinance; but it is necessary also to consider the nature of the business sought to be regulated, and the probable regulation which will be necessary to effectuate the purposes of the ordinance.

Appellants say the authority to pass the ordinance in question is found in the fourth subdivision of section 5648 of Kirby’s Digest, which section confers additional and enlarged powers upon cities of the first class, and that the part of said section conferring the authority for ■the ordinance under consideration reads as follows: “And to prevent or regúlate the carrying on of any trade, business or vocation of a tendency dangerous to morals, health or safety * * * and to prevent, abate or remove nuisances of every kind, and to declare what are such.” To determine whether or not the ordinance in question is authorized, and the authority for its enactment conferred by the language quoted it will be necessary for us to consider whether or not the sale of cider is a proper subject of municipal regulation; and, if it is found to be, then the further question arises whether or not the fee imposed by said ordinance was designed to cover the estimated cost of regulation, or was intended as a means of raising revenue.

Is the sale of cider a proper Subject of regulation? Appellee says that if this ordinance is not void, cities may impose a license upon all merchants as .such. But we think this is not so, for in our opinion the sale of cider is not an improper subject of regulation. Cider is' defined in 7 Cy'c. 130, as “an alcoholic beverage obtained by the fermentation of the juice of apples; a fermented liquor made from the juice of apples — formerly used of all kinds of strong liquors except wine; a drink made from the juice of apples.” An interesting case which discusses the chemical composition of cider, and which shows that it may be an alcoholic and intoxicating beverage, and when such can not lawfully be sold in a State whose statutes prohibit the sale of alcoholic or fermented liquors, is Eureka Vinegar Co. v. Gazette Printing Co., 35 Fed. 570. This is a very learned opinion and was delivered by Justice Caldwell, as judge of the Circuit Court of the Eastern District of Arkansas.

The city of Lawrence, in the State of Kansas, passed an ordinance regulating the sale of cider, which was not intoxicating, and prohibited its sale in less quantity than one gallon and forbid the drinking of same at the place of sale. This ordinance was attacked upon the ground that it was a violation of private rights, and was an unreasonable restraint upon trade, and was not authorized under any legislative enactment of the State. It was held that “the legislative power given to city councils to enact and make all such ordinances, by-laws, rules and regulations, not inconsistent with the laws of the State, as may be expedient for maintaining the peace, good government and welfare of the city and its trade and commerce,” was a sufficient authority for the enactment of such an ordinance. It was there insisted that cider is a harmless and wholesome drink and that the restraint upon its sale was unreasonable, in contravention of a common right and therefore unconstitutional'. In upholding that ordinance the Supreme Court of that State said: “The ordinance was manifestly not enacted in pursuance of the prohibitory law, nor for the regulation of the sale of intoxicating' liquors. The ordinance inferentially permits the sale of cider in quantities of a gallon or more, and the penalty for its violation may be $10, without imprisonment. These provisions are not consonant with the laws prohibiting and punishing the unlawful sale of intoxicating liquors, and hence we must infer that the ordinance was passed for the purpose of controlling the sale and disposition of cider that was not intoxicating. It will be observed that the ordinance regulates, rather than prohibits, the sale of cider and the legislative power to regulate the sale of an article or’ liquid, which, in some stages, is harmless and in others hurtful, is no longer open to question. The juice of apples quickly changes from fresh to hard cider, and hard cider is presumptively not only a fermented but an intoxicating liquor. State v. Schaefer, 44 Kan. 90. It is difficult to say when the change occurs, and when it reaches such a state as will produce intoxication. It may have been thought that the drinking of cider might foster a taste for strong liquors, and that if. the unrestricted sale of cider by the glass was permitted, the officers might be easily deceived as to the character of drinks sold and that a tippling shop might be carried on under the guise of a place to sell cider. In the interest of the health of the people, and the peace and good order of the communities, it was deemed wise to regulate the traffic. To sell it by the gallon and allow it to be drunk upon the premises, where sold, was deemed to be subversive of good order and dangerous to the health and morals of the people, and hence they imposed a regulation that it should not be sold in less quantities than one gallon, and should not be drunk at the place of sale. Such a regulation violates no private right and does not unreasonably or improperly restrain trade.” The court then proceeds to show that while there is no provision of the statutes of Kansas directly authorizing the enactment of such an ordinance, yet that the city possessed authority to pass the ordinance under the general welfare clause, which authorized city councils “to enact and to make all such ordinances, by-laws, rules and regulations, not inconsistent with the laws of the State, as may be expedient for maintaining the peace, good government and welfare of the city and its trade and commerce.” Monroe v. Lawrence, 44 Kan. 607, 10 L. R. A. 520:

It is a matter of 'Common -observation that where -the sale of liquor has been prohibited, a common method of violating the law, which works this prohibition, is to engage ostensibly in the sale of what is ordinarily called soft drinks, and that cider is one of the drinks so sold. And we know, too, from the authority of the cases herein cited that, by processes of fermentation, cider may cease to be sweet and become intoxicating.

Other interesting cases on this subject are those of Commonwealth of Pennsylvania v. Reyburg, 2 L. R. A. 415; In re Jahn, 41 Pac. 956; Lincoln City v. Linker, 47 Pac. 174; 51 Pac. 807, and 53 Pac. 787; also Eureka v. Jackson, 54 Pac. 5.

At the time of the passage of the ordinance in question it was -unlawful to sell intoxicating liquors of any character within ten miles of the city of Texarkana, it having been made so by Act No. 26, of the Acts of the General Assembly of 1913, prohibiting “the sale or giving away or storing or keeping stored for another person any alcoholic liquors, or any spirituous, ardent, vinous, malt or fermented liquors, or any compound or preparation thereof commonly called tonics or medicated liquors,” which act of the General Assembly was approved February 7, 1913. This ordinance does not give one, who pays the fee therein provided, the right to sell any kind of eider, the sale of which is made unlawful by the special act of the General Assembly above mentioned. Evidently, one of the purposes of the ordinance is to obtain information if cider was sold which it was unlawful to sell. The resolution dated June 24,1913, expressly so provides. But even though we may not consider this resolution in ascertaining the purpose of the ordinance, the answer alleged that the chief of police had frequent inspections made by chemical analysis to ascertain the character of cider being sold by the various dealers therein in the city. It can not be said that the purpose of an ordinance is not that of regulation, simply because the ordinance contains no provision for the inspection or regulation of the business to be licensed thereunder. In the case of the City of Helena v. Miller, 88 Ark. 263, where a municipal ordinance of the city of Helena imposed an annual license fee of $25 upon hotels and $15 upon boarding houses, the contention was made that the ordinance was void, as having been 'passed for the purpose of raising revenue and not for the purpose of regulation, because no provision was contained in the ordinance providing for the inspection or superintendence of the business there licensed; but the court held that the ordinance should not be declared void on that account. We have many cases which discuss the authority of municipal corporations to impose a license, such as is imposed by the ordinance now under consideration, and it has been said in a number of these cases that it is our duty to indulge every reasonable presumption in favor of the validity of the ordinance, and not to declare it void unless it plainly appears to be so.

In the case of Helena v. Miller, supra, it is said: “It is difficult for the court to draw the line precisely between amounts which are reasonable and those that are unreasonable. The license fee fixed by the ordinance may, however, be so high that the court will, on the face of it, declare it to be unreasonable (Stamps v. Burk, 83 Ark. 351), or so low that the court will declare it to be reasonable.” A leading case on this subject, and one which has been generally quoted in the different opinions of this court, is the case of Fayetteville v. Carter, 52 Ark. 301, in which case' it was said: “A fee sufficient to cover the expenses of issuing the license, and to pay the expenses which may be incurred in the enforcement of such police inspection or superintendence as may be lawfully exercised over the business, may be required. It is obvious that the actual amount necessary ta. meet such expenses can not in all cases be ascertained in advance, and that it would be futile to require anything of the kind. The result is, if the fee is not plainly unreasonable, the courts ought not to interfere with the discretion of the council in fixing it; and unless the contrary appears on the face of the ordinance requiring it, or is established by proper evidence, they should presume it reasonable.”

In the case of Trigg v. Dixon, 96 Ark. 199, an ordinance of the city of Texarkana, Arkansas, which imposed a license of $50 upon all persons engaged in the business of a butcher was upheld. That ordinance was upheld as having been authorized both under section 5438 of Kirby’s Digest, giving cities and towns power to establish and regulate markets, and also under section 5648, subdivision 4, giving cities of the first class authority to prevent or regulate the carrying on of any trade, business or vocation of a tendency dangerous to morals, health or safety, and it was said there, as has been said in numerous other cases, “the power to regulate includes the power to license as the means of regulating. ”

Upon consideration of the decisions in various oases of our own, as well as of other courts, we think the test of the reasonableness of an ordinance imposing a license for the purpose of regulation may be said to be, that if it is such a sum as is so manifestly excessive, and out of proportion to the regulation which will probably be required to make the ordinance effective, so that it is certain the city will derive a profit from the enactment of the ordinance, then, in all such cases it may be said that the purpose of the ordinance is to raise revenue, and.such ordinances are void, when no statute authorizes their enactment for the purpose of raising revenue.

On the other hand, if the amount of the regulation is uncertain, and its cost is indeterminate, depending upon circumstances, which may vary, and it does not appear that the license imposed is so out of proportion to the probable most of its enforcement as that the ordinance will necessarily be the source of income to the municipality, such ordinances should not be declared invalid, as having been passed for the purpose of raising revenue, rather than the purpose of regulation, although they may in fact prove to be the source of profit to the municipality.

We conclude, therefore, that the sale of cider either by wholesale- or retail is a proper subject of municipal regulation; and that the license imposed by the ordinance in question is not so excessive that we must say, .a's a matter of law, it was passed for the purpose of raising revenue ; un'd the decree of the court ¡sustaining the demurrer to appellant’s answer is therefore reversed, and the cause will be remanded with directions to overrule said demurrer.